UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number 0-14451
Acap Corporation
(Exact name of small business issuer as specified in its charter)
State of Incorporation: IRS Employer Id.:
Delaware 25-1489730
Address of Principal Executive Office:
10555 Richmond Avenue, 2ND Floor
Houston Texas 77042
Issuer's telephone number: (713) 974-2242
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. x Yes No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING MAY 8, 2000
Common Stock, Par Value $.10 7,224
This Form 10-QSB contains a total of 18 pages, including any exhibits.
<PAGE>
ACAP CORPORATION AND SUBSIDIARIES
FORM 10-QSB
INDEX
Page No.
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance
Sheet - March 31, 2000 (Unaudited) 3
Condensed Consolidated Statements of
Operations - Three Months Ended
March 31, 2000 and 1999 (Unaudited) 5
Condensed Consolidated Statements of
Cash Flows - Three Months Ended
March 31, 2000 and 1999 (Unaudited) 6
Notes to Condensed Consolidated
Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
Part II. Other Information:
Item 1. Legal Proceedings 12
Item 6. Exhibits 13
<PAGE>
PART I. ITEM 1. FINANCIAL INFORMATION
ACAP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
ASSETS
Investments:
Fixed maturities available for sale $ 38,705,388
Mortgage loans 1,013,066
Policy loans 6,287,190
Short-term investments 1,769,001
-----------
Total investments 47,774,645
Cash 1,089
Accrued investment income 777,461
Reinsurance receivable 100,754,351
Notes receivable 4,088,295
Accounts receivable (less allowance
for uncollectible accounts of $88,256) 671,172
Deferred acquisition costs 1,705,948
Property and equipment
(less accumulated depreciation of $638,789) 864,074
Costs in excess of net assets of
acquired business (less accumulated
amortization of $1,491,371) 1,182,407
Net deferred tax asset 199,195
Other assets 869,703
-----------
$158,888,340
===========
See accompanying notes to condensed consolidated financial statements.
continued . . .
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Policy liabilities:
Future policy benefits $137,981,413
Contract claims 3,871,021
-----------
Total policy liabilities 141,852,434
Other policyholders' funds 2,300,247
Deferred gain on reinsurance 2,170,391
Deferred gain on sale of real estate 277,611
Note payable 1,250,000
Other liabilities 4,363,681
-----------
Total liabilities 152,214,364
-----------
Stockholders' equity:
Series A preferred stock, par value $.10 per share,
authorized, issued and outstanding 74,000 shares
(involuntary liquidation value $2,035,000) 1,850,000
Common stock, par value $.10 per share,
authorized 10,000 shares, issued 8,759 shares 876
Additional paid-in capital 6,259,589
Accumulated deficit (307,191)
Treasury stock, at cost, 1,533 shares (507,362)
Accumulated other comprehensive loss-net unrealized
losses, net of taxes of $409,751 (621,936)
-----------
Total stockholders' equity 6,673,976
-----------
$158,888,340
===========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ACAP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
Revenues:
Premiums and other considerations $3,794,809 1,085,315
Net investment income 549,165 482,062
Net realized investment gains 306 -0-
Reinsurance expense allowance 978,414 1,106,602
Amortization of deferred gain 70,328 60,187
Other income 77,681 8,444
--------- ---------
Total revenues 5,470,703 2,742,610
--------- ---------
Benefits and expenses:
Policy benefits 2,738,001 993,648
Commissions and general expenses 2,536,957 1,292,811
Interest expense 28,671 8,846
Amortization of deferred acquisition costs 64,010 83,635
Amortization of costs in excess of net
assets of acquired business 59,916 59,916
--------- ---------
Total benefits and expenses 5,427,555 2,438,856
--------- ---------
Income before federal income tax expense
(benefit) 43,148 303,754
Federal income tax expense (benefit):
Current 40,494 71,164
Deferred (10,312) (23,965)
--------- ---------
Net income $ 12,966 256,555
--------- ---------
Other comprehensive loss:
Net unrealized holding losses arising
during period, net of tax of $10,881 in 2000
and $24,182 in 1999 (32,066) (635,529)
--------- ---------
Comprehensive loss $ (19,100) (378,974)
--------- ---------
Earnings (loss) per share:
Net income (loss) per share-basic $ (4.77) 29.05
========= =========
Net income (loss) per share-diluted $ (4.77) 28.04
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ACAP CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
Cash flows from operating activities:
Net income from operations $ 12,966 256,555
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization 107,202 97,671
Net realized investment gains on investments (306) -0-
Deferred federal income tax benefit (10,312) (23,965)
Decrease in reinsurance receivables 1,119,173 751,436
Increase in accrued investment income (144,641) (134,479)
Decrease (increase) in accounts receivable (36,369) 248,252
Increase in other assets (1,211,787)(1,024,533)
Decrease in future policy benefit liability (2,364,299) (264,907)
Decrease (increase) in contract claim liability (294,334) 70,195
Increase in other policyholders' funds liability 97,580 33,139
Increase in other liabilities 715,262 218,072
---------- ----------
Net cash provided by (used by) operating activities (2,009,865) 227,436
---------- ----------
Cash flows from investing activities:
Proceeds from sales of investments available for sale
and principal repayments on mortgage loans 815,495 754,678
Purchases of investments available for sale (1,386,606)(1,324,755)
Net decrease (increase) in policy loans 76,053 (39,071)
Net decrease (increase) in short-term investments 2,745,274 (430,320)
Purchase of property and equipment (45,408) (31,459)
---------- ----------
Net cash provided by (used in) investing activities 2,204,808 (1,070,927)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of note payable -0- 1,500,000
Principal payments on note payable (62,500) (562,500)
Deposits on policy contracts 270,961 321,757
Withdrawals from policy contracts (482,089) (362,947)
Preferred dividends paid (47,406) (46,250)
Treasury stock purchases -0- (480)
---------- ----------
Net cash provided by (used in) financing activities (321,034) 849,580
---------- ----------
Net increase (decrease) in cash (126,091) 6,089
Cash at beginning of year 127,180 120,332
---------- ----------
Cash at end of period $ 1,089 126,421
========== ==========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
ACAP CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of March 31, 2000 and the
condensed consolidated statements of operations and cash flows for the
three month periods ended March 31, 2000 and 1999, have been prepared by
Acap Corporation (the "Company"), without audit. In the opinion of
management, all adjustments (which, except as may be noted below, include
only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and changes in cash flows at
March 31, 2000 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in
the Company's December 31, 1999 Form 10KSB. The results of operations for
the three month periods ended March 31, 2000 and 1999 are not necessarily
indicative of the operating results for the full year.
2. ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No. 131
establishes standards for the way that public business enterprises report
information about operating segments in interim financial reports issued
to stockholders. The provisions of SFAS No. 131 did not have an impact on
the company in 1998 since the company did not have different operating
segments. The Company acquired a material block of health business during
1999, and accordingly, the Company began disclosing information about
different operating segments in 1999.
3. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per common share is computed by dividing net income
(less dividends paid on preferred stock of $47,406 and $46,250 for the
three months ended March 31, 2000 and 1999 respectively) by the weighted
average common shares outstanding (7,224 at March 31, 2000 and 7,240 at
March 31, 1999).
Earnings (loss) per common share on a diluted basis is computed by dividing
net income (less dividends paid on preferred stock of $47,406 and $46,250
for the three months ended March 31, 2000 and 1999, respectively by the
weighted average common shares outstanding as if stock options were
exercised (7,224 at March 31, 2000 and 7,500 at March 31, 1999).
4. STOCKHOLDERS' EQUITY
During the three months ended March 31, 2000, stockholders' equity changed
for the following items: Decrease in net unrealized investment gains of
$32,066; net income of $12,966; cash dividends paid on preferred stock of
$47,406.
5. STATESMAN TRANSACTION
On October 19, 1998, Texas Imperial Life Insurance Company, a wholly-owned
subsidiary of American Capitol executed an agreement to acquire the stock
of Statesman National Life Insurance Company ("Statesman"). To facilitate
the Statesman acquisition, American Capitol entered into a coinsurance
agreement with Statesman dated November 17, 1998, in which American
Capitol coinsured, on a 100% quota share basis, a portion of Statesman's
Medicare supplement business effective October 31, 1998. The acquisition
transaction closed on December 16, 1998. Statesman was owned by the
brother of the majority shareholder of Acap, and, as a result, this
qualified as a related party transaction. Texas Imperial issued a
promissory note of $100 to the sellers of the Statesman stock ("Sellers").
At the time of the acquisition of the Statesman stock by Texas Imperial,
Statesman had approximately $1.8 million in surplus debentures issued to
the Sellers. The Sellers' debentures backed the Sellers' representations
and warranties and were to be adjusted based upon the outcome of certain
post-closing price adjustments. In connection with closing, Texas
Imperial purchased an $800,000 surplus debenture from Statesman to bring
Statesman's statutory equity to the level required by the Texas Department
of Insurance (the "Department") as a condition of the Department's
approval of Texas Imperial's acquisition of Statesman. As used herein,
the "Statesman Transaction" refers to the above-described Texas Imperial
acquisition of the stock of Statesman, Texas Imperial purchase of the
$800,000 surplus debenture from Statesman, and American Capitol
coinsurance of a portion of Statesman's Medicare supplement business.
In January, 1999, it was discovered that Statesman's claim liabilities
were significantly understated. The liability understatement exceeded the
amount of the Sellers' debentures. Given the mutual mistake of fact upon
which the stock purchase, the surplus debenture purchase and the
Department's approval of same were based, Texas Imperial, the Sellers, and
Statesman agreed to rescind the purchase of the stock and the surplus
debenture. However, the rescission required the approval of the
Department. The Department did not grant its approval. As a result,
Texas Imperial determined that the $800,000 Statesman surplus debenture
was uncollectible and recorded the realized investment loss on the
debenture in 1998 and wrote off its investment in Statesman of $100.
Statesman was placed in receivership by the District Court of Travis
County, Texas 250th Judicial District (the "Court") on June 10, 1999.
On June 10, 1999, the Court approved a Liquidation Plan Regarding the
Insolvency and Liquidation of The Statesman National Life Insurance
Company (the "Liquidation Plan") executed by American Capitol, Texas
Imperial, Statesman, the Department and the National Organization of Life
and Health Insurance Guaranty Associations ("NOLHGA"). Pursuant to the
Liquidation Plan, American Capitol and Texas Imperial assumed all life
insurance policies issued by Statesman since September 30, 1998 as well as
all of the Medicare supplement and hospital indemnity health insurance
policies in force in Statesman. Participating NOLHGA guaranty
associations funded the transaction with a combination of cash and
promissory notes. In determining the funding amount, among other things,
the Company received credit in an amount equal to the $800,000 surplus
debenture Texas Imperial purchased from Statesman during 1998 and which
Texas Imperial wrote off at December 31, 1998. Pursuant to the
Liquidation Plan, at a prescribed point three years after the closing of
the assumption transactions, the actual results during the three year
period of the Medicare supplement policies in question will be compared to
the projected results for that same period and, if the actual results have
been better than projected ("excess profits"), the participating NOLHGA
guaranty associations will be entitled to participate in the excess
profits as a refund in an amount prescribed by a formula set out in the
Liquidation Plan. If the actual results are worse than the projected
results, the guaranty associations are not obligated to compensate the
Company for such shortfall. The assumption transactions closed on June
18, 1999 with an effective date of June 1, 1999. Approximately $11
million in cash and notes were transferred to the Company from the
participating NOLHGA guaranty associations and approximately $10 million
in liabilities were transferred to the Company in connection with the
assumption transactions.
Other aspects related to the Statesman Transaction include the transfer to
the Company of policy administration system software necessary to enable
the Company to administer the Statesman Medicare supplement policies
assumed from the guaranty associations.
6. SUPPLEMENTAL INFORMATION REGARDING CASH FLOWS
Cash payments of $280,000 and $-0- for federal income taxes were made for
the three months ended March 31, 2000 and 1999, respectively.
Cash payments of $28,332 and $19,913 for interest expense were made during
the three months ended March 31, 2000 and 1999, respectively.
The following reflects assets acquired and liabilities assumed relative to
the assumption agreement for the policies of Statesman, the consideration
received for such assumption and the net cash flow relative to such
assumption on May 31, 1999:
Assets acquired $ 10,893,429
Liabilities assumed (10,093,429)
Credit received (800,000)
Gain from assumption $ -0-
===========
Net cash from assumption:
Cash acquired $ 1,510,314
Credit received 800,000
Gain from assumption -0-
-----------
Net cash provided from assumption $ 2,310,314
===========
7. NOTE PAYABLE
On March 31, 1999, the Company repaid the $500,000 balance on its note
from Central National Bank ("CNB") by borrowing $1,500,000 from CNB. The
balance of the proceeds from the new loan was used to pruchase a surplus
debenture from American Capitol. The note is renewable by the bank each
April 30 until fully repaid. The note bears interest at a rate equal to
the base rate of a bank. Principal payments on the note of $62,500
are due quarterly (a six year amortization) beginning April 30, 1999.
The loan agreement contains certain restrictions and financial covenants.
Without the written consent of the bank, Acap may not incur any debt, pay
common stock dividends or sell any substantial amounts of assets. Also,
American Capitol is subject to minimum statutory earnings and capital and
surplus requirements during the loan term. The Company is in compliance
with all of the terms of the loan as of March 31, 2000.
8. NOTES RECEIVABLE
In connection with the Statesman Transaction, seven promissory notes
totaling $8,525,608 were issued by four different state guaranty
associations. The interest rate on the notes is fixed at 5.3%. The first
payment of principal of $4,437,313 along with accrued interest of
approximately $113,000 was paid September 18, 1999. There are no other
scheduled payments until maturity at December 2, 2002 when the balance of
$4,088,295 and all accrued and unpaid interest is due.
The promissory notes are essentially credit risk free because the notes
are backed by all member insurers of an association. A guaranty
association has the statutory authority to assess solvent insurance
companies doing business in the state to meet its obligations. If the
maximum assessment allowed in any one year does not provide the necessary
funds, additional assessments are made as soon thereafter as permitted by
the guaranty association act.
<PAGE>
ACAP CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Life Segment
Life premiums and other considerations were 24% higher during the three
months ended March 31, 2000 in comparison to the comparable period in
1999. Effective May 31, 1999, the Company acquired certain blocks of
business originally issued by Statesman National Life Insurance Company
from participating guaranty associations represented by the National
Organization of Life & Health Guaranty Associations (the "Statesman
Transaction"). While the business so acquired was primarily Medicare
supplement health insurance business, a portion of the acquired business
was life insurance business. Whereas life premiums for the first quarter
of 2000 include premiums on the life business acquired through the
Statesman Transaction, life premiums for the first quarter of 1999 do not.
The Company receives an expense allowance for administering certain blocks
of reinsured life insurance policies. The expense allowance for the three
months ended March 31, 2000 was 12% lower than the expense allowance for
the comparable period in 1999. The decrease in the expense allowance
during 2000 is due to attrition of the reinsured policies.
Primarily as a result of the above factors, total life segment revenue was
3% higher during the three months ended March 31, 2000 in comparison to
the comparable period in 1999.
Life segment policy benefits were 82% of total premiums and other
considerations during the three months ended March 31, 2000 in comparison
to 100% of total premiums and other considerations during the comparable
period in 1999. The Company experienced improved mortality results during
the first quarter of 2000 in comparison to the first quarter of 1999.
Total life segment expenses (i.e., total benefits and expenses less policy
benefits) were 26% higher during the three months ended March 31, 2000 in
comparison to the comparable period in 1999. The Company currently
operates on three policy administration systems. The Company plans to
convert from two of the current systems onto the remaining system. Once
the conversions are completed, the Company expects to experience lower
unit costs as a result of enhanced capabilities of the system and the
efficiencies resulting from being on a single system. To accomplish the
conversions, the Company added programming and conversion resources during
the latter part of 1999. The conversion process is expected to take
approximately two years.
Primarily as a result of the increased level of general expenses, life
segment income before income taxes was $28,991 for the three months ended
March 31, 2000 in comparison to $325,912 for the comparable period in
1999.
Health Segment
Total health segment revenue increased 471% during the three months ended
March 31, 2000 in comparison to the comparable period in 1999. The
increase resulted primarily from the Medicare supplement health insurance
and hospital indemnity health insurance business acquired in connection
with the Statesman Transaction. Also, the Company began marketing
Medicare supplement health insurance in May 1999.
Total health segment policy benefits were 68% of total health segment
revenue during the three months ended March 31, 2000 in comparison to 80%
of total health segment revenue during the comparable period in 1999. The
lower benefit to revenue ratio is attributable to the Medicare supplement
health insurance and hospital indemnity health insurance business acquired
in connection with the Statesman Transaction and the Medicare supplement
health insurance newly marketed since May 1999.
Total health segment expenses (i.e., total benefits and expenses less
policy benefits) were 32% of total health segment revenue during the three
months ended March 31, 2000 in comparison to 24% of total health segment
revenue during the comparable period in 1999. The health insurance
business acquired through the Statesman Transaction and the Medicare
supplement health insurance newly marketed since May 1999 has a higher
commission rate than the business that was in force during the first
quarter of 1999.
Health segment income before income taxes was $14,157 for the three months
ended March 31, 2000 in comparison to a loss before income taxes of $22,158
for the comparable period in 1999.
LIQUIDITY AND CAPITAL RESOURCES
Primarily due to an increase in market interest rates during the three
months ended March 31, 2000, the Company reported net unrealized
investment losses that were $32,066 larger than they had been at December
31, 1999. It is not anticipated that the Company will need to liquidate
investments prior to their projected maturities in order to meet cash flow
requirements.
CAUTIONARY STATEMENT
The 1995 Private Securities Litigation Reform Act provides issuers the
opportunity to make cautionary statements regarding forward-looking
statements. Accordingly, any forward-looking statement contained herein
or in any other oral or written statement by the Company or any of its
officers, directors or employees is qualified by the fact that actual
results of the Company may differ materially from such statement due to
the following important factors, among other risks and uncertainties
inherent in the Company's business: state insurance regulations, rate
competition, adverse changes in interest rates, unforeseen losses with
respect to loss and settlement expense reserves for unreported and
reported claims, and catastrophic events.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 5, 1999, a civil action (the "Action") was filed by Martin L. Skeen
and William F. Skeen ("Plaintiffs") in the court of Chancery of the State
of Delaware (the "Court") against Acap and Acap's directors
("Defendants"). The Plaintiffs asked the Court (1) to direct the
Defendants to pay Acap the $800,000 lost as a result of the write-off of
the surplus debenture purchased from Statesman in connection with the
Statesman Transaction, (2) to direct the Defendants to account for all of
the transactions related to the Statesman Transaction, (3) to require a
new election of directors after full disclosure with respect to the
Statesman Transaction, and (4) to award such other damages and relief as
may be appropriate, including the costs of the Action. Plaintiffs also
questioned the compensation of Acap's President in respect to the employee
benefit "Split Dollar" insurance arrangement. The action was filed
without advance demand or notice to the Defendants.
Acap has consistently denied all of the allegations in the Plaintiff's
Original Complaint and has maintained at all times that the claims by the
Plaintiffs are without merit. As previously reported, through a transaction
with the National Organization of Life and Health Guaranty Associations in
June 1999, see "Statesman Transaction," Note 5 of the Financial Statements
above), Acap, as a part of the transaction, received a credit in the amount
of $800,000 which was equal to the amount of the surplus debenture that had
been written off in 1998. To avoid the costs of further litigation, the
parties reached a settlement agreement, which has been submitted to the
court for approval. The agreement provides for (1) dismissing without
prejudice all of the Plaintiff's claims against all of the Defendants, (2)
including an agreement by Acap to have any related party transaction
approved by a committee of outside directors, (3) allowing Plaintiffs access,
if requested, to Acap's records to determine whether there will be or is
likely to be any loss to Acap arising out of the events alleged in the
Plaintiff's Original Complaint, (4) providing for Acap's shareholders to
receive 30 days advance written notice of the terms of the settlement to
allow for any objection, if any, prior to entry by the Court of the Final
Order, and (5) providing that Acap agrees to pay Plaintiff's costs ($17,000)
incurred in connection with the Action.
In addition, Acap and its subsidiaries are involved in various lawsuits
and legal actions arising in the ordinary course of operations.
Management is of the opinion that the ultimate disposition of these
matters will not have a material adverse effect on Acap's results of
operations or financial position.
ITEM 6. EXHIBITS
Exhibit 27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2000 to be signed on its behalf by the undersigned
thereunto duly authorized.
ACAP CORPORATION
(Registrant)
Date: May 10, 2000 By:/s/William F. Guest, President
------------------------------
Date: May 10, 2000 By:/s/John D. Cornett, Treasurer
------------------------------
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31,
2000 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY R4EFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<DEBT-HELD-FOR-SALE> 38,705,388
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 1,013,066
<REAL-ESTATE> 0
<TOTAL-INVEST> 47,774,645
<CASH> 1,089
<RECOVER-REINSURE> 100,754,351
<DEFERRED-ACQUISITION> 1,705,948
<TOTAL-ASSETS> 158,888,340
<POLICY-LOSSES> 137,981,413
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 3,871,021
<POLICY-HOLDER-FUNDS> 2,300,247
<NOTES-PAYABLE> 1,250,000
0
1,850,000
<COMMON> 876
<OTHER-SE> 4,823,100
<TOTAL-LIABILITY-AND-EQUITY> 158,888,340
3,794,809
<INVESTMENT-INCOME> 549,165
<INVESTMENT-GAINS> 306
<OTHER-INCOME> 77,681
<BENEFITS> 2,738,001
<UNDERWRITING-AMORTIZATION> 64,010
<UNDERWRITING-OTHER> 2,536,957
<INCOME-PRETAX> 43,148
<INCOME-TAX> 30,182
<INCOME-CONTINUING> 12,966
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,966
<EPS-BASIC> (4.77)
<EPS-DILUTED> (4.63)
<RESERVE-OPEN> 4,165,355
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 3,046,649
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<CUMULATIVE-DEFICIENCY> 0
</TABLE>
